Humphrey v. City of Phoenix

• Court: Arizona Supreme Court
• Writing for the Court: ROSS, C.J.
• Citation: Humphrey v. City of Phoenix, 55 Ariz. 374, 102 P.2d 82 (Ariz. 1940)
• Decision Date: 06 May 1940
• Docket Number: Civil 4261
• Parties: H. C. HUMPHREY, Appellant, v. CITY OF PHOENIX, a Municipal Corporation; WALTER J. THALHEIMER, as Mayor of the City of Phoenix; J. R. FLEMING, REED SHUPE, H. L. WALSH and M. F. WHARTON, as Members of the Commission of the City of Phoenix; CHRIS TOTTEN, EMMETT McLAUGHLIN, ROBERT A. BECKER, C. W. BOND and J. E. REFSNES, as Members of the Housing Authority of the City of Phoenix, Appellees

102 P.2d 82

55 Ariz. 374

H. C. HUMPHREY, Appellant, v. CITY OF PHOENIX, a Municipal Corporation; WALTER J. THALHEIMER, as Mayor of the City of Phoenix; J. R. FLEMING, REED SHUPE, H. L. WALSH and M. F. WHARTON, as Members of the Commission of the City of Phoenix; CHRIS TOTTEN, EMMETT McLAUGHLIN, ROBERT A. BECKER, C. W. BOND and J. E. REFSNES, as Members of the Housing Authority of the City of Phoenix, Appellees

Civil No. 4261

Supreme Court of Arizona

May 6, 1940

APPEAL from a judgment of the Superior Court of the County of Maricopa.

Arthur T. LaPrade, Judge. Judgment affirmed.

Messrs Moore & Romley for Appellant.

Mr Hess Seaman, City Attorney, Mr. W. C. Fields, Assistant City Attorney, for Appellees other than Housing Authority.

Mr. I A. Jennings, for Appellee Housing Authority of the City of Phoenix.

OPINION

ROSS, C.J.

H. C. Humphrey, in his own behalf as a taxpayer and in behalf of others similarly situated, commenced this action against the City of Phoenix, its governing body, and the members of the Housing Authority of such city to enjoin them from proceeding to acquire, construct and operate three proposed housing projects in said city under the provisions of chapter 82, Laws of 1939, known as the "municipal housing law."

On motion of the defendants the court dismissed the complaint for insufficient facts on which to grant relief. The plaintiff elected to stand on his complaint and appealed from the judgment of dismissal.

The action was brought for the purpose of determining the constitutionality of the municipal housing law. If such law is constitutional, the complaint states no cause of action and was properly dismissed. Such law is intended to enable cities and towns of the state, in which unsafe and insanitary housing conditions exist, to remove such conditions and substitute therefor safe and sanitary dwellings for persons of low income. The law was formulated and passed by the state legislature for the purpose of permitting cities and towns of the state to take advantage of the provisions of the "United States Housing Act of 1937", 42 U.S.C.A., §§ 1401-1430, as amended The avowed purpose of this last act is stated as follows:

"§ 1401. Declaration of policy. "It is hereby declared to be the policy of the United States to promote the general welfare of the Nation by employing its funds and credit, as provided in this chapter, to assist the several States and their political subdivisions to alleviate present and recurring unemployment and to remedy the unsafe and insanitary housing conditions and the acute shortage of decent, safe, and sanitary dwellings for families of low income, in rural or urban communities, that are injurious to the health, safety, and morals of the citizens of the Nation."

This act creates a corporation to be known as the United States Housing Authority, hereinafter referred to as USHA, as the agent or instrumentality of the federal government to carry out its purpose of aiding cities and towns that may undertake to rid themselves of slum areas and to convert such areas into safe and sanitary places to live. It prescribes the terms and conditions upon which it will lend the government's credit, fixes the extent and kind of assistance it will give, and places the administration of such service in the USHA. Since such law was passed, many of the states have enacted laws similar to our municipal housing law providing for a set-up meshing, in a general way, with the federal act. Such legislation empowers municipalities to accept governmental aid on the terms and conditions such aid is offered.

The municipal housing law contains a declaration that there exists in this state unsafe and insanitary housing accommodations, in which persons of low income are forced to reside; that there is a shortage of safe and sanitary dwellings which such persons can afford to rent with their income and consequently are forced to occupy overcrowded and congested dwelling accommodations; that such conditions multiply crime and disease and menace the health, safety, morals and welfare of the residents of the state, and impair economic values; that these areas cannot be cleared nor can the shortage of safe and sanitary dwellings be relieved through private enterprise, and that the construction of such projects would not be competitive with private enterprise; that such projects are for a public use and purpose for which public money may be spent and private property acquired and are governmental functions of state concern.

The City of Phoenix, on April 5, 1939, in pursuance of the Arizona municipal housing law, by ordinance (No. 2897), found, determined and declared that:

"(a) Insanitary and unsafe inhabited dwelling accommodations exist in the City of Phoenix, Arizona, and

"(b) There is a shortage of decent, safe and sanitary dwelling accommodations in the City of Phoenix available to persons of low income at rentals they can afford, and

"(c) There is a need for a housing authority in the City of Phoenix."

and created the Housing Authority of the City of Phoenix, consisting of five members, and delegated to such Authority the power to construct, maintain, operate and manage any housing project or projects within the city in accordance with the Arizona municipal housing law. Subsequently, on October 17, 1939, the city, by ordinance (No. 3018), delegated to its agent, the Housing Authority, all its powers under the municipal housing law except the power to borrow money, issue bonds and acquire real property. Specifically, the Authority was given the power to look after the details of locating and acquiring sites for housing projects and the construction of the projects, and to execute all contracts and agreements required by the USHA.

The city proposes to develop projects of 510 dwelling units suitable for low-income persons and to that end has authorized the issuance of its obligations (called bonds) in the principal sum of $1,972,000, bearing interest at the rate 3 1/4 per cent. per annum, of which the USHA has agreed to purchase $1,613,000 worth.

Under the terms of the municipal housing law (chap. 82, supra, sec. 11) and under the terms of the agreements between the city and the USHA, and under the provisions of the city's ordinances, the latter's bonds are payable exclusively from the income and revenues of the housing projects financed with the proceeds of such bonds and grants and contributions from the federal government, and from no other sources; and it is provided that such bonds shall not constitute an indebtedness within the meaning of any constitutional or statutory debt limitation or restriction. The obligee's remedy on defaulted bonds is limited to the enforcement of any pledge or lien given to him on rents, fees or revenues. Sec. 18. The city, in such agreements with the USHA, represents that the projects and bonds issued to promote them are exempt from taxation.

Plaintiff contends that chapter 82, supra, is unconstitutional in the following particulars:

"(a) It is in contravention of Section 17 of Article II of the Constitution in that Section 8 of said Chapter 82 attempts to vest in municipal corporations the power of eminent domain to be exercised for a private purpose, namely, acquiring of real property upon which to erect buildings for rental to persons of low income.

"(b) Said Chapter 82 is in contravention of Section 13 of Article II of the Constitution in that said act attempts to grant to a class of citizens, namely those of low income as defined in said Chapter, privileges or immunities which upon the same terms do not equally belong to all citizens of the State.

"(c) In that said Chapter 82 exempts the property acquired and the bonds issued by municipal corporations in connection with housing projects from all taxation.

"(d) In that said Chapter 82 attempts to authorize municipal corporations to incur indebtedness and issue bonds without limitation as to amount and without reference to the valuation of the taxable property in the City, in contravention of Section 8, Article IX of the Constitution.

"(e) In that said Chapter 82 attempts to authorize municipal corporations to loan credit to persons of low income in contravention of Section 7, Article IX of the Constitution of Arizona."

Plaintiff also contends that it was error for the court to dismiss the complaint, for the following reasons:

"(a) That said contracts entered into by the City of Phoenix and United States Housing Authority, Exhibits 'B' and 'C' attached to the complaint are ultra vires and void for the reason that said contracts by their terms attempt to bind the City of Phoenix in its future action upon matters of governmental and legislative policies and attempts to require of said city that it use its police power in the particulars required by said contracts.

"(b) That said agreements require that the City of Phoenix spend public funds and use public property for private uses, viz providing dwellings for rental to persons of low income.

"(c) That City of Phoenix is precluded from entering into said contracts, Exhibits 'B' and 'C', or from exercising any of the powers conferred upon municipalities by said Chapter 82 for the reason that said City operates under a charter form of government adopted pursuant to Sections 2 and 3 of Article XIII, Constitution of Arizona, and the legislature is without power to confer upon said City of Phoenix powers in addition to those contained in its charter.

"(d) That said Ordinance No. 3018, Exhibit 'D' of the complaint, is null and void for the reason that the charter of the City of Phoenix does not authorize its commissioners to delegate to said Housing Authority any of its powers or functions or those of its City Manager and other...